When the jumper is closed it is operating in SATA150 mode. Use this mode if your motherboard only has SATA150 ports. Otherwise it might not properly recognize the drive.
When the jumper is open it is operating in SATA300 mode. Use this if your motherboard has SATA300 ports. It will still work in SATA150 mode, however, but obviously the bandwidth will be limited to 150mb/s.
Now, does it really matter which mode you use? No. You won't be able to max it out either way.
Really the jumper is there so that SATA300 drives can be compatible with SATA150 motherboards.
Oh, and yes you can change the jumper without reinstalling Windows.